Hard negotiations and fierce debates are already underway on whether the OPEC/N-OPEC deal to reduce production by almost 1.8 million barrels per day should be extended or not. This Sunday the review committee comprising five countries; Kuwait, Algeria, Venezuela, Russia, and Oman will sit together to review the compliance with the current deal. This meeting is expected to set the stage for the more important meeting between the member countries of the OPEC on 23rd May 2017. Though it will be an OPEC meeting, N-OPEC participating countries are also expected to join.

One of the concerns that have surfaced in the past two weeks is the sharp drop (more than 10 percent) in oil price. Saudi Arabia, which is considered as the de facto OPEC leader and shared the biggest burden of cuts, is worried that it might be subsidizing free riders with its participation in the deal. There have already been two months since the deal came into force but still, 8 of the 11 participating OPEC members have failed to comply with the deal. According to third party estimates, Saudi Arabia produced almost 0.5 million barrels less that its stipulated target while the second-largest producer Iraq has produced almost 190,000 barrels more than its target. In addition to that, Saudi Arabia is also upset about the fact that since the OPEC deal in last November, US shale production has increased by 417,000 barrels per day.

The message that is coming out of the Saudi Kingdom is that they will participate in the extension of the deal but will no longer tolerate free riders.